Earnings Preview: Polo Ralph Lauren Corp.

Polo Ralph Lauren Corp. (RL) is expected to report Q2 earnings before market open Wednesday, November 5, with a conference call scheduled for 9:00 am ET.

Guidance

Analysts are looking for a profit of $1.25 on revenue of $1.36B. The consensus range is $1.18 to $1.32 for EPS, and revenue of $1.31B to $1.4B, according to First Call. In August the company forecast Q2 revenue growth in the mid-to-high single digits and raised its FY09 EPS guidance to $4 to $4.10 from $3.95 to $4.50 vs. First Call consensus of $4.06.

Analyst Views

In an October 21 note to clients, J.P. Morgan analyst Evren Dogan Kopelman initiated shares with a Neutral rating due to the difficult economic environment. Kopelman said Polo Ralph Lauren has a strong brand that could grow long-term internationally and in new categories, but he remains concerned in the near-term that the company's more mature, core U.S. apparel business will continue to struggle.

Burt P. Flickinger with Strategic Resource Group, a retail consulting firm, believes apparel companies are facing a crisis as consumers cut back on many purchases in addition do "doing without apparel" this season. He sees retailers cutting back on inventory as shoppers cut back on purchases due to declining spending power.